Life Insurance Corporation of India (LIC) IPO Message Board (Page 81)

@ipobull @manjitsingh

TCS target price?

Though unrelated I want views from the friends here about the open offer of escorts share. The company is being acquired by a Japanese company that triggered the open offer

Time period is March 14 to March 28' 2022

Escorts share can be offered in the open offer. Do note, it is not buyback and profit realised will be subject to capital gains tax if any.

@Arun 2 sir,
It is a complete misgiving that 90 % of the profit of LIC belongs to the policyholders. Though it is a misgiving, it has given rise to a very important question to break through to understand the episode. It remains mentioned that under the relevant provision of IRDAI, the pvt insurance companies are also working. SBI LIFE (which is a pvt company having deemed shortcomings of psu ) traded at 1280 some one and a half month ago under the same constraints though it has history of paying intermittent yearly dividend at Rs 2 and less except one year at 2.5.
Why the FDI money (raised from 26% to 74%) chasing these companies while thare is a prospect of only a paltry gain according to your narration ?
Is it as you have told or there is something beyond it ?

Your kind response is solicited.
Thank you

Let me attempt again
Any life insurance and general insurance company maintains two balance sheets. Please see annual report under public disclosure section
For example for LIC see link given below
https://licindia.in/Bottom-Links/Public-disclosure/2020-21/Mar-2021
See L-3 Balance sheet as on 31.03.2021 on the link given above
In asset and liability section you will notice distinct policy holder funds as well as shareholder funds.
As far as 90% part is concerned please see section 28 of LIC act as amended. It makes it clear that for business of life insurance 90% of surplus belongs to participating policy holders
Life insurance business are stable and long term businesses so interest of some of the FDI is not surprising. It is like saying that why dividend yield share attracts special kind of shareholders
Every kind of share attracts a shareholder who thinks that risk return profile is suitable. It would be very difficult for me to explain in short that why people still buy Coal India or ITC (Hope is always there)

Thank you sir,
This time from the first four paragraph, I have not got any word like 'profit' . I have got a new word 'surplus' . Now the pertinent question is how does this"surplus"differ from profit. Until we understand it, it is an inediquate information leading to no conclusion. Accounting of general insurance business is quite different as much as there is no question of profit shareing etc.
As to the fifth paragraph, it has some material but can't explain the actual reason for FDI inflow in this industry.
As to the last paragraph, LI is a quite different business and any attempt to try to understand it with the help of example of any other conventional business may help to misunderstand the matter.

However, I am happy to note that you have engaged yourself in this difficult subject and we will get good information from you in the coming days.
Thank you

If markets won't go below 16k then I think this ipo should come in March itself.

There was a news today about trading in US stocks on NSE IFSC as below :
https://www.moneycontrol.com/news/business/markets/how-to-trade-in-us-stocks-on-nse-ifsc-a-ready-reckoner-8187451.html

Can someone please guide or put some light on this topic. The information on this link is little confusing to understand for me.

Thanks

Hello friends,

Do any of you invest in Sovereign Gold Bond? If yes, What is your experience? Is it beneficial?

Please don't ban me, asking query here as it may help others also specially in current situation to decide where to invest safely.

Thanks in advance.

I keep 7% gold and 3% silver in portfolio. I bought from Sbi which is super easy and also from secondary market when people are in distress, which is complex in calculation of yield.
But please see gold not as a investment but as a store value. Eg currency devalue all the time and consider inflation. Gold preserves value. Imagine a Russian who converted his entire assets to gold just before ruble down 40% in a single day.

@DSR,

As you mentioned that your time horizon is long term and you don't mind holding it till maturity, I believe SGB is a very good option which is absolutely safe and also gives reasonably good post tax returns. SGB different series reflect a price at which it is traded. Since not many people buy SGB from secondary market, it will not reflect the price of current price of Gold which is ok since you any way you are not expecting to trade.

SGB should not be compared to any other investment option like stocks, mutual fund etc, as perspective behind SGB is much more than just gains.....It is safety and hedging, along with a reasonable (much better than most of the FDs) and consistent returns.....Happy investing.

@ipobull @manjit
Tcs target price?

Greetings Investors! News is doing rounds that LIC's mega IPO is likely to get postponed, the exact details not yet known. With global inflation and oil prices hitting all time high, there is bound to be a liquidity crunch in the market. With the federal reserve too set on meeting and decide upon its monetary measures, it would only make it more of an inappropriate time to come out with an IPO in spite of having to allow up to 20% stake ownership in foreign hands.

We too feel that the time is not appropriate for such a mega IPO and that the government would be correct in postponing the issue to early next fiscal year i.e. sometime mid 2023.

What are your thoughts and reasons why it should or should not be done? Do share!

Best Wishes & Happy Investing!

@venturestack
Tcs target price?

@VSP sir
Your contention is valid .

LIC is holding approx 197 crore shares of ITC since many years & now a days he is earning 2K crore every year as dividends from ITC only and many other like that. LIC is holding approx 4% of market cap of NSE listed companies. It will be India’s biggest listed company. It’s just an example so don’t under estimate LIC. It will be very good investment in long term prospects.

Patel sir
Yours is a good observation.
Parwal sir
LIC is neither a distress seller nor an aggressive buyer. It is a genuine long term investor but with no similarity to a holding company. As it transact in high quantities, it has different method of acquisition and offloading without impairing the market. It has already booked a profit of about 40000cr this year. Think what will happen if it is done in the current market.
LIC has many shares in its long term portfolio at a cost that none can imagine.
Thank you

@R R Patel
90% of profit belongs to policy holders so why we as shareholder be excited on 10% profit when you are already paying more than book value for buying these shares as embeded value already has done mark to market and suggested valuation is 2 to 3 times of embeded value

Do anyone know, in zerodha if i choose weekly SIP on COIN, on which day of week order gets placed?

You get to select the date first installment..thereafter it automatically calculate after 7 days. Also if it's a holiday on the next sip it adjust to the next working day.

Can a person apply twice for LIC IPO? i:e both in policyholder category & general category?

No need to do all these things. On listing you may buy as many LIC shares as you want from market at less than the issue price.

On a lighter note, you can also buy in secondary market quota with discount

I believe LIC IPO will list on 30 or 31st March so that it count in current financial year.

I have updated PAN in my "lapsed" LIC policy on 27th Feb and today checked, its showing "PAN details are available in our records".
I will mostly apply only under policy holder category, with full amount of 2 lakh, even if discount given is minimum 5% or more.

Hi Investors
Can you please guide me where to open a bank account and demat account for an HUF which has the lowest overall cost structure, for the purposes of applying to IPOs

UPL BOARD TO CONSIDER BUYBACK ON 02 MARCH

Open market route.
No Tender offer.
BB price 875/-
CMP 690/-
BB size 1100 cr.

Life Insurance Corporation of India IPO – Issue Price:
Rs.1,600 – Rs.1,700 Share *(TENTATIVE)*


Life Insurance Corporation of India IPO – Schedule *(TENTATIVE)*

Earliest
08th March – Announcement of Price Band
10th March – Anchor Investors Allotment
11th March – Offer Opens
15th March – Offer Closes
21st March – Finalisation of Basis of Allotment
22nd March – Unblocking of ASBA Accounts
23rd March – Credit of Equity Shares to Depository Accounts
24th March – Commencement of Trading

Latest
15th March – Announcement of Price Band
17th March – Anchor Investors Allotment
21st March – Offer Opens
23rd March – Offer Closes
28th March – Finalisation of Basis of Allotment
29th March – Unblocking of ASBA Accounts
30th March – Credit of Equity Shares to Depository Accounts
31st March – Commencement of Trading


Life Insurance Corporation of India IPO – Issue Information *(TENTATIVE)*

Issue Opens on: 11 March 2022
Issue Closes on: 15 March 2022
Issue Type: Book Built Issue IPO
Issue Size: 31,62,49,885 Shares
Face Value: Rs.10/- per Share
Issue Price: Rs.1,600 – Rs.1,700 Share *(TENTATIVE)*
Discount: 5% (for Employees & Policy Holders)
Market Lot: 7 Shares
Listing At: NSE, BSE

Equity Shares outstanding prior to the Issue = 6,32,49,97,701 Shares
Fresh Issue of NIL Shares @1,700/- = Rs. NIL Crs
Offer for Sale of 31,62,49,885 Shares @1,700/- = Rs.*53,288.11Crs
(*considering 5% discount for Employees & Policyholders)
Equity Shares outstanding after the Issue = 6,32,49,97,701 Shares

Category-wise Break up:
Anchor – 8,06,43,751 Shares = 13,709.43Crs. (@1,700/-)
QIB – 5,37,62,480 Shares = 9,139.62Crs. (@1,700/-)
NII – 4,03,21,860 Shares = 6,854.72Crs. (@1,700/-)
RII – 9,40,84,341 Shares = 15,994.34Crs (Lot size: 7 = 1,34,40,620 Forms)
Employees – 1,58,12,494 Shares = 2,530.00Crs. (5% discount = @1,600/-)
PolicyHolders – 3,16,24,989 Shares = 5,060.00Crs. (5% discount = @1,600/-)
Total Issue – 31,62,49,885 Shares = 53,288.11Crs.

Subscription required for 1X
RII = 1,34,40,620 Forms
NII = 6,854.72 Crs.

 

Life Insurance Corporation of India IPO – Financial Information (Basis of Valuation)

The information is collated from the following documents:
1) DRHP = Draft Red Herring Prospectus Dated February 13, 2022 (652 pages)

EPS for FY18-19 >>> Rs 4.15 (Page #97 of DRHP)
EPS for FY19-20 >>> Rs.4.29 (Page #97 of DRHP)
EPS for FY20-21 >>> Rs.4.70 (Page #97 of DRHP)
EPS for H121-22 >>> Rs.2.38 (Page #97 of DRHP)

RoNW for FY18-19 >>> 322.25% (Page #98 of DRHP)
RoNW for FY19-20 >>> 317.14% (Page #98 of DRHP)
RoNW for FY20-21 >>> 45.65% (Page #98 of DRHP)
RoNW for H121-22 >>> 18.76% (Page #98 of DRHP)

NAV as on September 30, 2021 was Rs.12.68 (Page #98 of DRHP)

Listed Industry Peer Group (Page #99 of DRHP):
SBI Life Insurance Company,
HDFC Life Insurance Company,
ICICI Prudential Life Insurance Company


Life Insurance Corporation of India IPO – *Market’s Current Estimates of oversubscription*:

NII = 40KCrs. = ~5.84X
RII = 50L Forms = 0.37X Applic. wise (Firm Allotment of 7 shares per lot)

Interest cost *@7.00%p.a.* for 7days = *228.22 paise for 1X*

Thus, for NII the costing = 5.84 X 228.22 paise = Rs.13.32 per share (= GMP)

And, for RII the costing = 7 X 13.32 = Rs.93.22/- (= Subject2)

Life Insurance Corporation of India IPO – *GMP Estimated*

GMP 15 +/- 1
Kostak NIL
Subject2 @100/-


LIC IPO

Issue Price = 2.00 X Embedded Value (as of Sept’21)
Market Cap = 2.00 X 5,39,686 Crs = 10,79,372Crs
Rate per Share = MarketCap ÷ No. of Outstanding Shares = 12,14,293.50 Crs ÷ 6,32,49,97,701 = 1,707/-


Fair Value = 3.00 X Embedded Value (as of Sept’21)
Market Cap = 3.00 X 5,39,686 Crs = 16,19,058 Crs
Rate per Share = MarketCap ÷ No. of Outstanding Shares = 16,19,058 Crs ÷ 6,32,49,97,701 = 2,560/-


*LIC IPO*

*Comparison with Peer Group* 28/February

HDFC Life | CMP = 523.00 | No. of Shares = 2,11,18,13,255 | MCap = 1,10,448Crs. | Embedded Value = 29,543Crs. | MCap / EV = *3.739*

SBI Life | CMP = 1,060.95 | No. of Shares = 1,00,02,83,298 | MCap = 1,06,125Crs. | Embedded Value = 35,290Crs. | MCap / EV = *3.007*

ICICI Life | CMP = 479.50 | No. of Shares = 1,43,73,01,101 | MCap = 68,919Crs. | Embedded Value = 30,203Crs. | MCap / EV = *2.282*

And,
*LIC IPO | Issue Price = 1,700 *(TENTATIVE)* | No. of Shares = 6,32,49,97,701 | MCap = 10,75,250Crs. | Embedded Value = 5,39,686Crs. | MCap / EV = 1.992*


Life Insurance Corporation of India when compared to SBI Life Insurance Company Limited …

On “MarketCap / Embedded Value” ratio basis …

Does it deserve to be lower or higher?

Thank you

Welcome Back Original EE !!

Not waiting for some months in the face of present scenario tantamount to distress sale of a rich property.

Purchase of distressed property gives rich dividends in future. 💥💥

But the pricing also ought to be a distressed one.
If that doesn't happen, then investors will be distressed! ;-)

Thx to this war who had saved the LIC for atleast this time being.

No charm in.lic ipo next Paytm .& Car trade ban jayega ye. Better to buy Nifty stocks already corrected 30 to 40 percent

Ukraine war may delay LIC IPO to next FY, likely reassessment of March listing this week

https://www.moneycontrol.com/news/business/ukraine-war-may-delay-lic-ipo-to-next-fy-likely-reassessment-of-march-listing-this-week-8180431.html



Now Bhakto in tension